Entrepreneur Flashcards
Break-even point
The minimum sales revenue or total units sold needed for a business to be able to cover its own expenses and begin to make a profit.
Cash flow forecast
Process of estimating the cash that will be coming into a business and the cash that will be flowing out of the business during the same period of time.
Debt financing
Obtaining funds to start or operate a business by borrowing money that has been paid back to a lender.
Demand
The quantity (amount) of a good or service buyers are willing to purchase (per unit of time) at various prices.
Equity financing
Obtaining funds to start or operate a business by selling shares of ownership in the business; equity investors share in the profits.
Expense
Product costs plus operating expenses.
Interest
Price being paid to the lender for using his or her money.
Loss
Total expense minus total revenue expended, over a period of time, when the total revenue is less than the total expenses.
Market price
That price at which the quantity that buyers are willing to buy (per unit of time) is equal to the quantity that sellers are willing to supply.
Operating expense
Costs that are required to cover the basic, ongoing operation of the business such as rent, advertising, and utilities. For the production of goods, operating expenses do not include product costs.
Opportunity cost
The next best alternative use given up when resources (such as time or money) are used for an item or activity.
Product costs
Usually refers to the cost of the actual materials and labor used to produce the goods that are sold to customers. (Cost of goods sold)
Profit
Total revenue minus total expenses, over a period of time, when total revenue is greater than total expenses.
Revenue
Total dollar amount a business receives from the sale of its goods or services over a particular period of time.
Start-up costs
Total amount of money needed to get business up and running.
